One of the many misused phrases in our exciting world as on that basis the expression should be more like ‘pay caviar, get baboons’. At least that is what many people who called themselves bankers have proven over the last few years, but lets not go there.
It is pay levels that takes my interest and always has. Not so much my pay but how to reward the people that work with you fairly and in a way that motivates them and fortunately we can use the Olympics to show us some valuable lessons.
It would be unfair not to start with G4S. They were unable to recruit the staff they needed despite nice and no doubt expensive websites. The rate of pay offered was between £8.25 and £9.25 an hour. Not bad you might say, but now consider that the boss would not get out of bed unless he earned that per minute!
Whilst £8.25 per hour for a security position may not be too bad, in this case it was for a temporary job and I suspect not a great chance of finding a replacement job afterwards.
There were something like 70,000 volunteers who enjoyed every minute of the games according to all the reports, yet never saw a thing. Simply their enthousiasm drove them. Their pay? Nothing at all.
Contrast this with the tube drivers who make £46,000 a year but demanded and got a £400 bonus for working during the Olympics. Bus drivers demanded a £500 bonus simply to do the job they are paid for.
Security guards we pay £8.25 an hour, but care workers, the people who will be taking care of us when we grow old, we pay minimum wage, perhaps with a small surcharge, but I have never known them to be paid £8.25, let alone £46,000 a year.
The question is therefore, how are these rates set? As an employer I look at the market. So how did ‘the market’ determine that a banker who gambles your and my money should make millions, yet the person working in the branch to service your account and mine makes less than half what the tube driver makes.
How did the market determine that a security guard deserves to be paid more than a carer?
One reason may be because of the ‘he who shouts loudest’ syndrome. Channel 4 had a wonderful programme about Pimlico Plumbing and the way they paid their staff (http://www.channel4.com/programmes/show-me-your-money/episode-guide/series-1/episode-1) and then set about correcting matters. I never quite figured out whether Mr Mullins, boss of Pimlico, ever took a cut in this £1 million a year salary, but it was still worth watching.
It is clear that pay has nothing to do with whether you get monkeys or not. That mostly depends on how your recruit and how you treat staff.
It is equally clear that good results do not depend on big incentive packages.
However, determining what is the right package is still a dark art in so far as I am concerned.